FG’s Tariff Policy Pushes Electricity Subsidy to N536.4bn in Q1 – Report
The Nigerian Electricity Regulatory Commission (NERC) says the federal government incurred a total subsidy debt of N536.4 billion in the first quarter of 2025, due to its continued policy of non-cost-reflective electricity tariffs across all power distribution companies (DisCos).
In its 2025 Q1 report released recently, the commission said:
“It is important to note that due to the absence of cost-reflective tariffs across all DisCos, the Government incurred a subsidy obligation of N536.40 billion (59.16% of total NBET invoice) in 2025/Q1.”
The figure represents an increase of N64.7 billion from the N471.69 billion recorded in Q4 of 2024.
“The increase in the subsidy obligation of the FGN is a result of the FGN’s policy to freeze allowed tariffs paid by customers despite the increase in the cost-reflective tariffs across the quarters,” the commission stated.
NERC clarified that the government pays the shortfall between the actual cost of power and the frozen tariffs through the Nigerian Bulk Electricity Trading (NBET).
“For ease of administration, the subsidy is only applied to the generation cost payable by DisCos to NBET at source in the form of a DisCo’s remittance obligation (DRO),” it explained.
In terms of payment compliance, DisCos achieved a 95.79% remittance performance in Q1, up from 93.26% in Q4 2024.
“Benin, Eko, Ibadan, Ikeja, Kano, Port Harcourt and Yola DisCos achieved 100% remittance performance to NBET,” NERC revealed, while Kaduna DisCo recorded the lowest at 37.77%.
The report attributed the improvement to an 8.59% increase in collections by DisCos during the quarter.
